Ebola aftermath suffocates Liberian economy

Businesses suffered and jobs disappeared across Liberia during the Ebola outbreak, according to research funded by the International Growth Centre Liberia’s economic downturn during the Ebola outbreak was severe, with businesses in Montserrado county – home to the capital Monrovia – especially suffering, shows new research funded by the International Growth Centre (IGC).

According to a new IGC bulletin, 12% of businesses surveyed across Liberia during the peak of the Ebola crisis (September to November 2014) reported to have closed down since a pre-Ebola survey that began in 2012. This far exceeds Africa’s average business closure rate of 5% per annum. In Montserrado, 20% of businesses surveyed had closed down. This research was also published in the BMJ Journal of Epidemiology and Community Health.

During the outbreak the average number of people employed per business in the Monrovia area declined by 47%, and the number of business which had won a contract in the previous six months dropped by nearly 50%.

The research shows that the economic slowdown during the outbreak was not confined to areas of the country that experienced high infection rates.1 For example, in counties with fewer cases of Ebola, the average number of people employed per business fell by 24%.

Restaurants and food and drink businesses were among the sectors hardest hit. Thirty per cent of the restaurants surveyed before Ebola had closed at the peak of the crisis. Restaurants in the Monrovia area were half as likely to have won a contract recently and employed 63% fewer people.

Eric Werker, one of the authors of the paper and Senior Advisor to IGC Liberia, said: “This research suggests that the nation-wide economic downturn during the Ebola outbreak was severe, but that the association across locations with the case load was, at most, modest. The patterns suggest that the downturn may have been felt more intensely in parts of the market that are more sensitive to economic shocks of any sort. Efforts to rebuild the economy should focus on whether this damage is permanent, and, if so, whether a targeted intervention might be able to revive the economy”.

Jonas Hjort, another author of the study and IGC Lead Academic for Liberia, urged international organisations and corporations operating in Liberia to use Liberian suppliers and support local businesses whenever possible.

IGC researchers in Liberia had access to data from a large sample of businesses surveyed before and during the Ebola outbreak, providing a unique opportunity for researchers to study the evolution of Liberia’s economy during the outbreak. This data was provided by Building Markets as part of its mandate to include Liberian firms in global supply chains.-Press release